The first full day of the NACS Show began on Sunday Oct. 2, at the Las Vegas Convention Center with educational sessions on a wide range of topics from food to fuel, drawing retailers from across the globe.

Global Food Trends
In a session titled “Global Foodservice Trends and Menus,” speakers discussed the trends, innovation and approach to foodservice at c-stores around the world, including in Ireland, South Africa, Central America and Georgia. From trends in healthy food to technology to the opportunity for coffee, speakers compared how their countries differ.

In Ireland, a strong competitive landscape has led all stores to up their game. Stores are staying flexible, providing a lot of different offers for customers. Technology is a major trend, and tech evolution is moving at a rapid pace.

“Evolution has to move all the time. You cannot stay still,” noted Frank Gleeson, president and CEO of Aramark Northern Europe.

In South Africa, a big focus is supply innovation in terms of getting products into the stores as quickly as possible. Stores feature APCs (mini QSRs) that see 30-35% customer engagement. Stores are moving substantial volumes of food. As a result, food is about 95% prepared when it arrives to the store, prioritizing speed of service to the customer.

“We make it as easy as possible for the retailer convenience-wise and storage wise,” said Joe Boyle, managing director, Fresh Stop.

At AMPM Centroamerica stores, customers can find pizza, subs and hamburgers, but each country also features traditional region food items.

Pablo Andonie, president and CEO of AMPM Centroamerica, noted the chain uses social media influencers and ambassadors to communicate with customers. They reach more than 2 million followers when including influencer audience.

Coffee is also very important for the chain, and opportunity exists to create their own brand of coffee sourced locally. He encouraged the audience to consider innovation opportunities based on diversity.

Saba Jishiashvili, COO of Sun Petrolum (Gulf), in the country of Georgia, noted a lack of suppliers led them to import food products from Ukraine. They’re doing a big hot dog business.

On the technology front, they feature a loyalty program with 650,000 registered users. This allows for a huge data base they use to analyze customer behavior to help them achieve the right execution on promotions.

While trends and opportunities differ in each country all agree that convenience store foodservice is an important and expanding global trend.

Denton Cinquegrana, chief oil analyst, OPIS, shares an overview and outlook for the fuel industry.

State of Fuels
In a session titled, “State of the Industry Fuels Edition,” Denton Cinquegrana, chief oil analyst, OPIS, shared an overview and outlook for the fuel industry.

Cinquegrana noted that some of the trends he’s seeing with fuel this year, he’s never seen before, especially when it comes to the extreme market volatility. He pointed to headwinds and tailwinds impacting the industry whether you have a bullish or bearish perspective, from a recession watch to the conflict in Ukraine to hurricane season.

Global demand has recovered from the depressed 2020 levels, but production has not kept up with global demand.

Crude oil prices started rising earlier this year due to the conflict in Ukraine and hit $100 dollars per barrel this summer. Finally, oil prices are starting to come down, and today, prices are hovering in the high 70s to low 80s and should remain in that price range for the time being, Cinquegrana noted.

Inventories of gasoline and diesel are still tight and still lower than they would usually be. Total U.S. gasoline inventories remain some 10 million barrels below normal. Total U.S. distillate inventories are almost 30 million barrels below normal. Global refining capacity is down several million barrels per day, with some refineries transitioning to make biofuels. Market trends are encouraging refineries to make for distillate/jet fuel.

As we see more events from hurricanes to fires taking out refineries, we might see more refineries deciding not to restart, due to market trends, including fuel demand changes and electric vehicle headwinds.

Margins in 2022 have been impressive. The third quarter was at an all-time high and extreme market volatility played a role. Retail gasoline prices declined for 98 days and prices dropped by $1.34 since topping $5 a gallon in June. These big market swings are not going away.

This year, when premium gas hit $5 a gallon, customers started downgrading to regular gasoline. “That told me, we’re going to see some demand destruction when regular (gas) gets to $5, and we did see that,” Cinquegrana said.

Diesel’s downtrend is expected to slow. “I worry about the diesel market and diesel supplies going forward. I’m not worried about diesel dropping this winter; diesel supplies are really tight,” he said.

Gas demand has struggled of late in the U.S. The year started off solidly, with a rise in February, but as prices went up, demand went down, Cinquegrana pointed out. Now that gas prices are going down, gasoline demand is making a bit of a comeback.

Still, weekly gasoline demand remains below 2019 levels. With fuel efficient vehicles, the work- from-home trend continuing and a potential recession on the horizon, pre-pandemic demand levels may not be returning any time soon. The coasts, Northeast and Pacific are seeing the widest demand deficits.

C-stores are facing fuel competition as big box chains attract gas customers with price discounts. Costco is pricing fuel the most aggressively in the West — about 30 cents below the rest of the market.

Fuel efficiency is expected to go up. “Cars are going to be able to do more with less, and that’s going to chew into gasoline demand,” he noted. “That said we’re still going to be using a lot of fuel.” Customers are projected to be using 35 billion gallons of fuel in 2050.

Market volatility is here to stay and will continue to create opportunities. Electric vehicles are coming, but CAFE standards are the biggest threat to demand over the next decade, he warned.

Despite rising wages, Americans are not happy about high gas prices. “There’s three things that move the needle in the country, politics, religion and gas prices,” he said.

Even with a pull back, refiners have motivation to continue to run, with more refining capacity coming online.

The world will continue to need more energy as the global population grows, which brings with it opportunity.

Cinquegrana left the audience with some key takeaways: “Market volatility has created a new margin environment. Vehicle efficiency is more of a threat to demand in the short term. There are still growth-markets out there.”

The NACS Show continues through Tuesday, Oct. 4.